Pentagon's Budget Proposal Increases Costs to Families

A series of changes proposed by the White House in the president's annual budget plan looks to drastically change Tricare, increase health care fees, decrease commissary hours while increasing the cost of food, and lower the amount of money given to troops for housing costs.

The proposal, which faces an uphill battle on Capitol Hill before it can be approved by Congress, is unlikely to be moved into law late next fall without significant changes.

Like it did in 2015, the White House once again called for the consolidation of almost all Tricare plans into one plan known as Tricare Consolidated.

Under that plan, active duty family members, medically retired service members and their families, surviving families of those killed in action and the families of active guard and reserve members would be able to use military treatment centers (MTF), urgent care or emergency care for free.

There would also be no charge for any in-network specialty care for which they've received a referral. Those who live far away from a MTF would also be able to see a primary care provider for free, although no information was given on required distances.

But users who self-refer, or who choose to see an in-network primary care provider outside the MTF, would face fees for doing so dependent on their sponsor's rank. For example, users ranked E4 and below would pay $10 for a non-MTF, in-network primary care visit while E5–O3 would pay $15 and O4 and above would pay $20.

Cost shares at out of network providers would be 20 percent of the total charge to Tricare.

Non-medical retirees and their survivors below 65 would face even bigger cost increases. In addition to a new $289 for individuals or $578 for a family's yearly enrollment fee, proposed to start Jan. 1, 2017, they would face charges regardless of where they sought healthcare.

Fees would be slightly less at a MTF than at an in-network provider. For example, retirees and their family members would pay $10 for a primary care visit at the MTF, or $20 at an in-network provider. Cost shares at out of network locations would be 25 percent of the total charge.

All users under 65-years-old would also be penalized for using the emergency room for any illness not ruled an emergency, the proposal stated. Families of troops E4 and below would pay $30 both at a MTF and a civilian hospital, while E5 – O3 would pay $50 and O4 and above would pay $70. Retirees would pay $50 at an MTF or $75 at a civilian hospital.

New Tricare for Life users 65 and older will also face increased fees, according to the proposal. While current users will escape the costs, new users will be forced to pay a gradually increasing yearly enrollment fee based on a percentage of their gross retired pay. For 2016, officials propose a yearly fee of 0.5 percent of that pay, capped at $150 for most users and $200 for those who retired as flag officers. Those fees would increase to 2 percent by 2020, with a cap of $614 for most users and $818 for flag officers.

Prescription fees are also set to increase under the plan. Currently, a one month supply of generic medication at a civilian in-network pharmacy costs $8, a brand-name drug costs $20 and non-formulary drugs are only covered on a limited basis. Drugs administered at MTF pharmacies are free. Those received in a 3- month supply from Tricare's mail-order supplier are currently free for generics, $16 for brand-name drugs and $54 for non-formulary.

Under the proposal those fees will go up gradually over the next 10 years. The first increases for generic medication will be felt in 2019 with a $1 increase to $9 for in-person, one-month supply fulfillment and a matching $9 for a three month supply of mail-order maintenance drugs like birth control.

Brand-name drugs will increase in cost until they are $34 from both locations in 2019, and mail-order formulary drugs will have increased to $62 at that time. By 2025 all generic drugs will cost $14 regardless of how they are fulfilled, name-brand drugs will cost $46 and formulary drugs received by mail will cost $92 for a three month supply.

The proposal would also slow the growth of basic allowances for housing (BAH) by another 4 percent over the next two to three years, in addition to the 1 percent approved for this year. Therefore, service members eventually pay an average of 5 percent of the costs.

Officials said in the proposal that they will continue the rate decrease over the next two to three years. As has been the case in the past, they said, troops currently receiving a higher rate will continue to do so under "rate protection" until they are relocate.

Commissaries are likely to have decreased hours, be open fewer days and, as a result, cut staff under the $100 million funding cut proposed by the White House. The commissary currently receives $1.3 billion in tax-payer funding.

Shoppers are also likely to see some price increases if Congress approves changes to law suggested as part of the proposal. The plan calls for doing away with the current tax-payer subsidy that covers "second destination" shipping of goods to rural locations, and instead adding those costs to the price of products.

Officials said in the proposal that they will also be asking Congress to make changes to the laws currently governing the commissary so that the system can institute other, broader changes in 2017 like selling groceries at a profit and expanding the "types of good that can be bought and sold." While the proposal released today did not specify, previous plans have suggested adding alcohol to commissary shelves.

The consolidation of the commissary and exchange services into one entity proposed by the recently released Military Compensation and Retirement Modernization Commission was not included in the plan.

Some family programs are set to receive funding increases under the 2016 budget, while others would receive the same as they did in 2015. Child and youth services programs would receive $1.2 billion, up from $1.1 billion for 2015. Morale Welfare and Recreation (MWR) programs would receive a $200 million plus-up to $1.5 billion across the services. And on-base schools managed by the Department of Defense Education Activity (DoDEA) would receive a $100 million increase to $2.4 billion, the proposal says.

"As the Department continues to reshape its forces for current and future missions, it is committed to sustaining a balanced portfolio of family assistance programs that are fiscally sustainable," the proposal says.